Madrid property prices rise by 3.5% in Q2/2015

Eleven Regions in Spain recorded year-on-year free market price growth during the second trimester of 2015, with the Canary Islands (4,1 %); Madrid (3,5 %) and Aragon (3,5 %) standing out by having enjoyed the greatest increases. There are expectations of Spanish property growth in price during 2016, as an average

The average price of private housing grew by 1.2% in all communities in the second quarter to settle at 1476.8 €/sqm leaving behind 26 consecutive quarters of price reductions and undergoing the first annual increase since the third quarter of 2008, according to the data available to the Ministry of Development.

Compared to the previous quarter, the price of private housing also surged between April and June by 1.3% from 1457.9 €/sqm where it stood in the first three months of the year.

Since the peak levels reached during the first quarter of 2008, when at the height of the real estate boom, housing prices exceeded 2,100 €/sqm, this indicates a decline of 29.7%. In real terms, taking into account fluctuations in the CPI, the decline increases to 36.6%.

In real terms, accounting for inflation, the price of private housing experienced annual growth in the second quarter for the third consecutive quarter after climbing by 1.5%.

Before going through the first annual growth since the start of the recession, housing prices had stalled for nine consecutive quarters since the beginning of 2013, moderating economic adjustment.

After years of marked increases, during which growth of up to 56.6% was seen in 2005, the upward trend in housing prices finally ended in the fourth quarter of 2008, when a fall of 3.2% was observed.

Since then, the price of housing was hampered by slumps for 26 consecutive quarters, experiencing the greatest adjustment in late 2012 when a reduction of 10% was noted.

Regarding different property categories, the average price of private housing up to five years old reached 1732.9€/sqm in the second quarter, which was a 1% increase; whereas the used category (more than five years old) grew by 1.3% to 1467.5 €/sqm.

As far as the average price of subsidized housing is concerned, an annual reduction of 0.4% to 1094.6 €/sqmwas recorded.

The number of property valuations reviewed to calculate housing prices in the second quarter was 100,858, representing a swell of 6% compared to the same period in 2014.

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